AMD Posts Narrower Third-Quarter Loss

Advanced Micro Devices reported Thursday that despite stronger-than-expected sales in the third quarter, the company lost $128 million to bring its string of consecutive losing quarters to an even dozen.

AMD, of Sunnyvale, Calif., had third-quarter revenue of $1.4 billion, down 21.3 percent from the same quarter in 2008, but sales were up 22 percent from $1.18 billion in the second quarter of 2009.

The chip maker, which spun off its manufacturing business to form GlobalFoundries in March, was progressing along its "break-even model," said Dirk Meyer, AMD's president and CEO. Excluding the impact of the manufacturing spin-off, AMD -- the product company -- was profitable in the third quarter to the tune of $2 million, he said.

The company was also able to increase gross margins sequentially thanks to an increase in sales of 45-nanometer processors, better factory utilization and higher unit ASPs, Meyer said.

Identifying how AMD was able to beat financial analysts' expectations for revenue, Meyer singled out increased notebook sales due to a better-than-expected back-to-school season and AMD's strong performance in the China market.

Other third-quarter highlights Meyer noted were the release of AMD's next-generation ATI Radeon HD 5000 series of graphics cards, increased sales of Opteron six-core server chips and the growth of the company's chipset business.

Meyer also drew attention to two new AMD marketing programs rolled out in the third quarter -- the company's new Fusion Partner Program for whitebox builders and system integrators, and the simplified Vision logo campaign for retail.

AMD projected revenue to "be up modestly" in the fourth quarter. Meyer said that OEM and channel partner production of PC desktops and notebooks in anticipation of the pending release of Microsoft's new Windows 7 operating system was well under way.